The SMB Effect: UCaaS Market on Steady Growth Trajectory

Originally published by The Fast Mode / Image Credit: maxxyustas/

When considering business phone systems, small and mid-size businesses (SMBs) face significant capability limitations due to their size and scope of needs. Although they may want some services and not others, they are often restricted to the “small business” offerings, limiting what services they can access. Yet, today’s SMBs face many of the same obstacles as large organizations, such as economic issues, the proliferation of remote work, integration-related concerns and security.

As organizations increasingly embrace the advantages Unified Communication as a Service (UCaaS) provides, the industry continues to maintain steady growth with firms such as Grand View Research and Market Research Future predicting 20% annual growth through 2030. Interestingly, while most communication services vendors are focused on the enterprise market, UCaaS adoption among SMBs plays a key role in this market growth. Multiple drivers, such as affordable access to advanced communication tools, shifting vertical market regulations, and moving to remote/hybrid work environments, are increasing adoption rates of UCaaS among SMBs to fuel greater efficiencies and business growth.

Affordable access to enterprise-level services

UCaaS integrates various cloud communication services into a unified platform, such as conferencing, messaging and voice. These services are hosted in the cloud, rather than on-premises, allowing real-time collaboration and communication across multiple devices and locations. They can also integrate with other applications already on the desktop or mobile device to improve efficiency and the customer experience.

For example, during the pandemic, thousands of organizations adopted Zoom and Microsoft Teams services. Instead of replacing these services that are now familiar to employees, many UCaaS vendors will integrate with, say an organization’s Microsoft environment, enabling the business to continue to work in Teams while taking advantage of a UCaaS vendor’s superior voice and voice-related services, such as auto attendant and routing. This integration, which includes merging existing contact directories, offers a single source for all internal and external communications, reducing management oversight, streamlining the user experience, and allowing businesses to add services as they scale and create a best-of-breed communications environment.

Such advanced communication service ecosystems were once available only to large organizations that could afford the infrastructure, monthly service fees, and IT professionals required to maintain a robust communications platform. However, UCaaS negates the need for major infrastructure investments and IT support, enabling SMBs to harness the efficiencies and insights that were once earmarked only for enterprises.

With UCaaS, SMBs can opt for a subscription-based model, paying only for the services they use, which can result in significant cost savings. According to a Nemertes 2020-21 Cost Business Analysis Workplace Collaboration study, on-premises deployments cost 57% more than UCaaS deployments. The study found that organizations that rely on UCaaS spend, on average, $1,153 annually, compared to $1,830 per on-premises license.

Changing market regulations

At times, access to advanced communication services is a necessity for SMBs, especially when markets must adjust to shifting guidelines and regulations often prompted by security and/or legislative changes. For example, last year The Centers for Medicare & Medicaid Services implemented new requirements that had a significant impact on independent agents and brokers who sell Medicare Advantage and/or Part D plans.

One change requires that agents and brokers record all sales calls with beneficiaries in their entirety, including the enrollment process. Secondly, these recordings must be retained in a HIPAA-compliant manner for 10 years. Many agents and brokers are small business owners who lack IT support and need guidance on how to access the technology required to meet new guidelines. Others were concerned about how to comply with the new call recording guidelines when they often conduct business on the road using their mobile phones.

UCaaS offerings including HIPAA-compliant phone services, automatic and on-demand call recording, and secure cloud storage provided a cost-effective and efficient means for SMBs to address these changes. As market-specific regulations related to communications evolve, UCaaS will support SMBs in their need to pivot quickly and with minimal impact on business infrastructure and operational costs.

Flexible work environments

Amid the pandemic, most organizations embraced a remote work environment, at least temporarily. This global phenomenon ultimately changed the business communications landscape forever. Today, it is estimated that by 2025, 36.2 million Americans will work remotely, a 417% increase from pre-pandemic data, according to Zippia.

UCaaS solutions offer a range of communication and collaboration tools, such as conferencing, voice calling, file sharing, instant messaging and even mobile apps that enable employees to collaborate effectively regardless of their physical location. Team members can join virtual meetings, share documents and communicate in real-time, fostering teamwork and productivity. An added benefit, UCaaS consolidates these communication channels into a single platform, making it easier to manage and respond to communications, whether employees are in the office or working remotely.

Additionally, SMBs can easily scale their communication services up or down based on their needs. Business administrators can add new phone lines, accommodate more users, or extend services to new locations as needed to quickly adjust to meet the changing requirements of the business. This subscription-based model provides a cost-effective approach that benefits SMBs as they navigate fluctuating staffing and remote work arrangements.

SMBs fueling UCaaS growth

UCaaS offers a dramatic improvement in the communication services available to SMBs. For the first time, SMBs have affordable access to unlimited communication capabilities that empower employees to communicate, collaborate, and stay connected from virtually anywhere. With these services, SMBs realize they can achieve greater efficiency and productivity and pivot faster to accommodate changing market requirements.

As a result, SMBs are increasingly adopting UCaaS and contributing to the predicted market growth. With the technological freedom to choose where and how they want to operate their organizations, SMBs have limitless opportunities to hire, expand and collaborate on a global scale. In short, UCaaS enables SMBs to rapidly adapt to the evolving demands of the modern workforce, compete more effectively and thrive.

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